Apple Accuses Spotify of ‘Misleading Rhetoric’ and Stinginess

Variety — Stewart Clarke

Apple hit back Friday at Spotify’s anti-competition complaint against it in Europe, saying the music streamer had cloaked its “financial motivations in misleading rhetoric about who we are, what we’ve built and what we do to support independent developers, musicians, songwriters and creators of all stripes.”

The tech giant said that “Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs….

“After using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem – including the substantial revenue that they draw from the App Store’s customers – without making any contributions to that marketplace.”

Apple also took a broader swipe at the music service: “At the same time, they distribute the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it — even going so far as to take these creators to court.”

The sharply worded statement, running to more than 1,000 words, came two days after Spotify lodged an anti-competition with the European Commission in Brussels. In the complaint, in a subsequent speech by Spotify founder Daniel Ek and on a dedicated website, the music streamer alleges that Apple charges excessive fees, routinely blocks Spotify upgrades and unfairly promotes its own Apple Music service in the App Store.

Analysts said the Spotify-Apple spat was a long time coming.

“The beef between Spotify and Apple has been simmering for some time now, and it’s no secret that a number of services are not happy paying 30% on any subscription made through Apple’s payment system,” Simon Dyson, head of the music practice at analyst house Ovum told Variety. “It was only a matter of time before a service made an official complaint. If the European Commission decides to investigate Apple’s payment system, then the war of words between Spotify and Apple will intensify.”

Apple responded to several of Spotify’s complaints in detail. It said that its App Store was a platform where everyone plays by the same rules and that it had revolutionized the music industry and “helped create many millions of jobs, generated more than $120 billion for developers and created new industries through businesses started and grown entirely in the App Store ecosystem.”

Apple denied that it had blocked access to the Spotify app on its platform and said the only time it has requested adjustments to the app is when “Spotify has tried to sidestep the same rules that every other app follows.”

In terms of Apple’s cut of revenues from the app on its platform, Apple acknowledged the 30% share that it takes but said the amount falls to 15% after the first year of an annual subscription. It also said that “only a tiny fraction of [Spotify’s] subscriptions fall under Apple’s revenue-sharing model.”

Apple also took a shot at Spotify’s battles with artists over royalties. “Spotify’s aim is to makemore money off others’ work. And it’s not just the App Store that they’re trying to squeeze – it’s also artists, musicians and songwriters.”